ITV FTA decision: Not before April...

DMC · 19-11-2004 06:42PM

Santy will have to wait two months.....

http://media.guardian.co.uk/broadcast/story/0,7493,1355432,00.html

ITV delays decision on satellite switch

Chris Tryhorn and Owen Gibson
Friday November 19, 2004

The decision on whether ITV joins the BBC in a Freesat service to rival BSkyB's Sky Digital offering has been delayed by two months.

ITV's existing £17m a year contract to broadcast its channels - including ITV1 and ITV2 - via a BSkyB satellite runs out on Sunday.

But the two sides have agreed to a two-month extension to the deal, during which the ITV channels will continue to be available to Sky Digital customers, after failing to conclude negotiations ahead of Sunday's deadline.

At stake is whether ITV continues to pay for the place on BSkyB's satellite and its encryption service, which stops viewers outside the UK picking up ITV channels, or joins the BBC by broadcasting "in the clear" on a separate satellite.

"We've signed a two-month extension, so there'll be no news on Sunday. During that time, we'll carry on negotiating," said ITV's managing director, Mick Desmond.

A BSkyB spokesman also confirmed that negotiations would be continuing after the weekend.

"ITV and Sky have reached a temporary extension over conditional access arrangements relating to digital satellite distribution of ITV1 and ITV2," he said.

"As a result ITV1 and ITV2 will remain encrypted for the time being. Further discussion will take place in due course," the spokesman added.

ITV is unlikely to pay as much as the £17m a year it has paid for encryption - or "conditional access" - but it is also considering the more radical option of switching satellites.

If it went "in the clear", following a lead set by the BBC last year when it abandoned its encryption deal with BSkyB, that could have major implications for the satellite TV business.

The danger for BSkyB is that ITV could join the BBC in setting up a Freesat service, a satellite version of Freeview that would challenge Sky's own recently launched free satellite offering.

Even if ITV stayed with BSkyB, it could still join the BBC's Freesat, but viewers would then require a decryption card to watch ITV channels.

Encryption is an important issue for rights holders such as sports bodies and Hollywood studios, which do not want their properties being shown in "overspill" countries such as Ireland and France.

Colm80 · 19-11-2004 06:55PM

Thats a bit dissapointing better order my card now.

DMC · 19-11-2004 06:59PM

All this really means we'll be like this again on the 19th January!

But there is some hard bargaining going on...

channelsurfer · 19-11-2004 07:48PM

You might as well relax because itv will resign.. they are just holding out for less money.thats my two cents

mrdtv · 19-11-2004 08:02PM

Au contraire: there was an extension of two months or so before the BBC left as well! ITV have got Sky over a barrel:

1 The BBC are unencrypted and have got away with it.

2 They are both on the same satellite with the same footprint

3 The BBC pays Sky for the regionalisation.

4 Sky will have to offer ITV the same terms as the BBC because of OFCOM rules

5 If ITV were to get a better deal all other basic tier cable channels would want the same deal and OFCOM would insist on fair, reasonable and non-discriminatory terms.

6 Its very clear Sky and ITV are far apart.

7 By Xmas there will be 5M Freeview homes and by next Xmas there will be more Freeview homes than Sky.

8 Freesat in Germany: 45% penetration and analogue TV being shut down area by area

9 There's no point in trying to make changes over the Xmas period: remember it was a big job with the BBC and Sky don't make any engineering changes in the vital prex-Xmas period

10 ITV leased two more transponders to put more regional variations on satellite. This will cost more money annually to Sky.

Its time to say goodbye now: why pay £17M when the Beeb are paying £2M?

TCP/IP · 19-11-2004 08:17PM

looks like what i heard was true

Brian017 · 19-11-2004 08:21PM

DMC · 19-11-2004 08:28PM

TCP/IP wrote:

looks like what i heard was true

I wouldnt say that, its just that the decision has been postponed for 2 months.

channelsurfer · 19-11-2004 08:44PM

looks confused wonders what DMC the great Mod thinks of it all. It could be itv clearing the way for free to air ie in that it will take 2 months to implement the technology and agree an regionalisation deal with sky.. or it could mean that sky will offer itv mininium payment terms to stay encryted knowing that if they loose itv the freesat and freeview will hit very hard at their chances of reaching their 10 million subscribers target..
Personnaly I think the second option looks the more likely..

DMC · 19-11-2004 09:07PM

The BBC will be interested in this...

I think, after this weeks and today's events, that ITV may want to stay encrypted. Sky's customer database is a closer map for regionalisation than being FTA or using what the BBC use now. BBC Regions are not necessarily the same as ITV regions. And ITV wont want to loose that targeted regional advertising.

Encryption at what price, though....

mrdtv · 19-11-2004 10:42PM

NOT CORRECT, DMC, SORRY.

The BBC and ITV use the same Sky database (it has fifty four divisions if memory serves) and in the UK there was recently a change to correctly match up viewers to their local regions. The first since 1998. The current Sky regionalisation is a more accurate match to BBC and ITV regions. In fact this has been extensively covered on the specialist UK web sites in the last six months. OFCOM are fully aware of this he said knowingly. The real sticking points are

a) money

b) strategic control

c) the realisation that Freeview is walloping Sky in digital takeup (65k Sky vs 605k Freeview in the last audited quarter) and this will accelerate with £39 DTT boxes and every LCD next year will have Freeview on board.

d) the BBC dont pay and have more rights than the others
and

e) Sky have peaked. You just need to look at the year-on-year quarterly comparisons. That's it for secular pay-tv growth.

Its more convenient not to make the change over Xmas as a) Sky don't like the changes in the pre-Xmas period b) ITV don't want any audience impacts as this affects station average prices for the advertising ratecard in the vital pre-Xmas season c) the extra regional variations eg Wescountry West (the ITV1 Redruth version which is received via troposopheric scattering in SE Ireland during good weather via terrestrial) won't be on satellite till the the new year.

The boot is on the other foot now: ITVDigital is long dead, Sky have peaked, Freeview is a resounding success in the UK, who gives a stuff about TV3/UTV when you control the rights (1M TVHH ROI vs 25M TVHH UK, its the economics yet again!) . Finally if ITV do play in the Freesat domain they may save between £50M and £75M capex which could be required to build Freeview out to 99% UK coverage: OFCOM may require this if there is no Freesat alternative to DTT. The DRL licences are currently being negotiated and this a very high stakes poker game in which Sky is actually no longer the most significant player.

mrdtv

UK insider cynic...

DMC · 19-11-2004 11:00PM

Very interesting points, mrdtv, which I actually agree with.

I was aware that the database used by the BBC, from this link http://www.bbc.co.uk/pressoffice/pressreleases/stories/2003/06_june/13/dsat_statement.shtml

As part of the agreement, the BBC is buying a regionalisation service from BSkyB to ensure that viewers within the UK with Sky viewing cards will continue to automatically receive the right national and regional versions of BBC ONE and BBC TWO at 101 and 102 respectively.

... was not the same as the postcode database that Sky use for the ITV regions as they are encrypted. If has been updated since, then that does blow a hole in what I said

Rights, I feel, are no longer an issue, as all of ITV's recent sports rights have been renegotiated since the BBC went FTA and those discussions would've been factored in.

I would also agree that Christmas is also a factor. Regional ads at this time of the year make up for the rest of the year, and once the MFI and DFS sales are over after New years, ITV really have a full year to make FTA work for them, if they want to.

In all, a very sound argument, mrdtv.

lighthouse · 19-11-2004 11:33PM

It's been all so exciting.I have been waiting all week to find out if ITV was going free to air and now it seems we won't know for another 2 months.The excitement nearly killed me.I doubt if I will be able to go through all this in another 2 months,still if I am spared a few more hours after 19th January,oh to only live as long and see what is going to happen.Now where is my valium!

Dr. Nick · 19-11-2004 11:36PM

'UK insider cynic...' eh?

I agree Sky has peaked. Every business reaches a plateau.
It had to happen some time. ITV/BBC should strike now.

Multiplex · 20-11-2004 12:17AM

Great thread folks...makes good reading!

The truth is that ITV has now got its hands on all the cards and will play its ace in time. The newly merged ITV is seriously flexing its muscles and can dictate its own terms to Sky and the BBC if it wishes to choose Freesat.

The key factor is that ITV is starting to even challenge the new Ofcom - by stating in so many words "Why should we pay licences for the regional structure" when it can sit on as many platforms as possible without re-applying for regional licences every ten years or so. Of course the key for this is to ensure that as many people across ITV's broadcast area receive the station - so it would make sense to be FTA. Plus there are the commercial savings which has already been mentioned here.

The big problem now with ITV PLC (which has been discussed already) is that this places SMG, Channel and UTV in a very difficult position. If the combined Carlton/Granada can't buy the remaining regions...then ITV will just find platforms to place itself into Scotland, Northern Ireland and the Channel Islands without the sitting licence holders.

There could also effect TV3 as well considering Granada has a shareholding in it.

DMC · 20-11-2004 10:20AM

I dont think it does place UTV, Channel and SMG in a bad situation. ITV has become a television company in its own right, but it is still a federation of regional licences. After all, it was Carlton and Granada who decided the original deal. UTV et al will contribute to whatever it costs to DO WHATEVER ITV WANTS on satellite, pro rata to their audience size and share of that region.

Tony · 20-11-2004 01:36PM

mrdtv wrote:

NOT CORRECT, DMC, SORRY.

The BBC and ITV use the same Sky database

excellent post Sir

eoinm1 · 20-11-2004 02:49PM

This is very bad news for the FreeSat service the BBC want to offer.
Maybe ITV are just looking for a big discount.

I for one hope they go free to air, with satants sports ireland after getting the rights to the grand prix in Ireland.

Eóin

redabbey · 21-11-2004 09:48PM

ITV's prefered option is to remain FTV, however it will go FTA if it cannot agree a lower-cost deal with Sky. Those negotiations will continue.

Just read this quote on the Digital Spy Forums site. It was posted by ariusuk. This person knows what he is talking about. I have always found his comments to be accurate in relation to ITV coverage of Sport

kaiphas · 21-11-2004 10:18PM

All very interesting and learned posting..but in your opinions does this mean us plebs in Sky land should buy a card in the UK/Ebay or hold out.

legend99 · 22-11-2004 11:05AM

have Sky launched their free service yet...if so, where can one find info?

And if they have launched it, how easy/hard is it for one to get a card for it. And would that effectivly give you all the British terrestrial channels in Ireland?

Colm80 · 22-11-2004 11:21AM

Yes it is up and running. You need to have a uk address, or get some one over there to send a card on to you.

This is the site where you will find out about it http://www.freesatfromsky.com/

toonarmy · 22-11-2004 01:43PM

blast ... thought it would happen on the 20th !! not itv 2 ..no newcastle uefa game..................

DMC · 22-11-2004 01:53PM

Erm, toonarmy, all is not lost.

A thread here and reported elsewhere state that ITV2 is now FTV, which means if you have an FTV card, you should be able to see ITV2 now.

toonarmy · 22-11-2004 03:22PM

just have the normal sky digital card for the republic..any use no...?

i'd buy a card off anyone [if it can get to waterford by thursday]..and depending on price

watty · 22-11-2004 06:57PM

Add G54 to other channels

tune it

THEN remove FTV card. It seems to work indefinately. Someone with two boxes and one card could use this.

It won't start without the FTV card and doenst work on a FTA box.

G54 currently seems to be a low bitrate versio of ITV London.

Drag00n79 · 22-11-2004 07:09PM

watty wrote:

G54 currently seems to be a low bitrate versio of ITV London.

Yeah, noticed that on Saturday. Couldn't easily figure out which region it was though.

Macy · 23-11-2004 09:59AM

kaiphas wrote:

All very interesting and learned posting..but in your opinions does this mean us plebs in Sky land should buy a card in the UK/Ebay or hold out.

Well disappointingly I think it's the FTV Card route for me. Lived fine with the BBC's till I thought there was good chance ITV would be clear, and sod it, you'll still get the ITV's if they do go clear, plus C4 and C5. Here's hoping they still will go clear though.

DMC · 06-01-2005 08:20PM

It does seem ITV want to stay encrypted, but not at Sky's current price....

ITV complains to regulators over Sky access deal
http://media.guardian.co.uk/city/story/0,7497,1384835,00.html

Chris Tryhorn, City correspondent
Thursday January 6, 2005

ITV has made a formal complaint to regulators about charges BSkyB wants to impose for ensuring that satellite viewers receive the correct regional version of the channel.

ITV has alleged in a statement to Ofcom that Sky's proposed charges are "unfair, unreasonable and unduly discriminatory and therefore in breach of BSkyB's obligations under EU and UK law".

The complaint comes after the two broadcasters failed to reach agreement over ITV's new contract with Sky Digital, which was supposed to have been renewed in November.

A two month stay of execution was granted but talks have reached an impasse and ITV has decided it has no option but to have BSkyB investigated.

ITV wants at least £13m slashed off its annual £17m a year bill for Sky's services to encrypt and regionalise its channel. Under any new contract, ITV is unlikely to pay its current rate, and the two sides have stalled on negotiations.

ITV has to decide whether to follow the BBC and broadcast "in the clear", abandoning Sky's encryption services that stop viewers outside the UK picking up ITV channels.

It launched ITV3 without encryption in November, and is considering whether to adopt the same approach for all its channels.

At the moment ITV pays for a range of services with Sky, which include providing the right regional version of ITV1 in its slot at 103 on the electronic programme guide, and guaranteeing that only satellite viewers with decryption cards can watch it.

Encryption is an important issue for rights holders such as sports bodies and Hollywood studios, which do not want their properties being shown in "overspill" countries such as Ireland and France.

ITV believes it is entitled to a deal at least as low as the £4m a year reportedly paid by the BBC under a contract signed in 2003.

It is citing an Ofcom rule that "comparable broadcasters purchasing comparable services at broadly similar times should pay comparable prices".

Before the BBC negotiated its contract with Sky, its then director general Greg Dyke had threatened to quit Sky's satellite services altogether.

Although the BBC did in the end go "in the clear", it signed up to a new package of services to ensure the right regional editions of BBC1 and BBC2 appeared in the 101 and 102 slots.

ITV now wants its flagship channel ITV1 to get a similar deal and hopes to persuade Sky to come back to the negotiating table or get Ofcom to rule in its favour.

The regulator has four months from today to rule on the complaint, though it is likely that an agreement will be struck sooner.

A Sky spokesman defended the company's charges: "Sky provides conditional access and EPG services on fair, reasonable and non-discriminatory terms and has done so since the launch of the digital satellite platform in 1998.

"We look forward to demonstrating to Ofcom that the charges we proposed for ITV1 are consistent with our regulatory obligations."

ITV confirmed that it had submitted a formal complaint to Ofcom.

"In ITV's view, BSkyB's proposed charge for this service - which would ensure that the right regional variants of ITV1 were available at button 103 of BSkyB's programme guide - are unfair, unreasonable and unduly discriminatory and therefore in breach of BSkyB's obligations under EU and UK law," a spokesman for the company said.

ITV also complained to watchdogs about Sky's charges for "conditional access", or encryption, after it negotiated its last contract in November 2001. The regulator at that time, Oftel, later rejected the complaint.

Colm80 · 06-01-2005 08:47PM

Looks like this saga is going to go on and on.

ITV FTA decision: Not before April...

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